November 2012

1

The home-builder stocks have been one of the best performing stock sectors over the past year. This industry group really emerged as a market leading sector October 4, 2011 when the major stock indexes put in a significant low. Since that time, leading home-builder stocks such as Toll Brothers Inc (NYSE:TOL), and Lennar Corp (NYSE:LEN) have increased by more than 100.0 percent. This sector has also provided an increase in construction jobs which has helped this economy over the past year. Should the home-builder sector start to decline in 2013 it could be signaling some serious problems for the U.S. economy.

One of the primary drivers for the home-builder sector has been the artificially low interest rates that are being created by the Federal Reserve. The central bank has been buying $40 billion worth of mortgage backed securities (MBS) a month since it announced its latest QE-3 program. Earlier today, a report was released that stated home buyers are coming back as contracts for October increased by 5.2 percent from a month earlier. This is once again being aided by low interest rates. The 30 year fixed mortgage is now at 3.40 percent which is an all time low.

Now everyone knows that the fiscal cliff in the United States is looming. Many politicians have announced that they would like to cut the mortgage interest tax credit. If that tax credit were to end it could once again cause home prices to decline. Many first time home buyers depend on that tax credit as a major incentive to invest in a home. We shall see what the politicians do when it comes to this important tax credit. A strong case can be made that the housing sector must be revived if the United States is to have any sustainable recovery, manufacturing is certainly not going to do it.

Today, most leading home-builder stocks are trading higher on the day. Leading home-builder equities such as DR Horton Inc, KB Home (NYSE:KBH), and Beazer Homes USA Inc (NYSE:BZH) are all trading higher on the session. The near term problem with the home-builder stocks is that they are now all trading below the important and psychological 50-day moving average. Until this moving average is recaptured with conviction on the charts the sector looks vulnerable for a correction over the next couple of months.

1

Chinese solar stocks have been priced for bankruptcy. Over the last two days that may be changing. Word from China is starting to turn positive as these companies are now looking towards selling their solar panels inside China instead of outside. In addition, China seems to be subsidizing them nicely, supporting them from bankruptcy. Earlier this year, the U.S. imposed huge tariffs on solar imports as a measure to penalize dumping on the open market.

Overall, the only solar stock that has performed extremely well in the few months is First Solar, Inc. (NASDAQ:FSLR). First Solar bottomed at $11.43 back in May 2012. Since then it has more than doubled, hitting a high today of $27.40. Overall, this was the major standout while most other solars have kept making new 52 week lows.

Today, small solar stocks are ripping, especially Chinese solar stocks. Trina Solar Limited (ADR) (NYSE:TSL) is trading at $2.69, +0.36 (15.45%). This stock hit a new 52 week low just a few days ago at $2.30. In addition, other Chinese solar stocks are ripping higher as well. LDK Solar Co., Ltd (ADR) (NYSE:LDK), Suntech Power Holdings Co., Ltd. (ADR) (NYSE:STP), JA Solar Holdings Co., Ltd. (ADR) (NASDAQ:JASO) are just a few that are pushing higher today.

Overall, the Chinese solars do have more upside to them. Look for the ones that are still close to their lows. There are enough shorts in these that a squeeze could net a 50% gain from the lows with ease.

0

This morning, all of the major stock indexes are trading lower to start the day. One important sector that is declining lower today is the base and industrial metal stocks. This sector is very closely related to the Chinese economy. China has been the growth engine of the world until last year when the Chinese economy began to slow down. This is exactly when the base and industrial metal stocks topped out. Often, when the Chinese stock market comes under selling pressure the base and industrial metal stocks will trade lower. Recently, there have been many rumors that the Chinese government would begin to stimulate (inflate) their economy, however, the important Shanghai Index (Chinese stock market) has sold all short term bounces. The weak China economy has kept the leading base and industrial metal stocks somewhat depressed.

One leading base and industrial metal stock that is trading lower today is Freeport McMoRan Copper & Gold Inc (NYSE:FCX). Today, FCX stock is declining lower by 0.62 cents to $37.87 a share. Short term traders should watch for intra-day support around the $37.65, and $37.40 levels.

Please remember, all of the base and industrial metal stocks will generally trade inverse to the U.S. Dollar Index, therefore, should the dollar decline the base metal stocks could catch a bid. Some other leading base and industrial metal stocks that are declining lower today include Rio Tinto plc (ADR) (NYSE:RIO), BHP Billiton Limited (ADR) (NYSE:BHP), Teck Resources Ltd (USA) (NYSE:TCK), and Vale SA (ADR) (NYSE:VALE).[more]

Recs

0

This morning, many of the leading oil refining stocks are trading slightly lower on the session. One of the leading stocks in the sector is Tesoro Corp (NYSE:TSO). Today, TSO stock is trading lower by 0.17 cents to $41.29 a share. The stock appears to have a fair amount of daily chart resistance around the $42.00 area on the daily chart. Short term traders can watch for intra-day support around the $40.90, and $40.30 levels.

Some other leading oil refinery stocks that are declining lower today include Valero Energy Corp (NYSE:VLO), Phillips 66 (NYSE:PSX), HollyFrontier Corp (NYSE:HFC), and Western Refining Inc (NYSE:WNR). It is important to note that this sector has been very strong throughout 2012. All of these stocks are still holding up very well on the daily charts at this time, however, many of them will begin to hit resistance levels shortly.

2

Chinese ADR's are finally waking up with a vengeance. These stocks have been in an arctic winter for years it seems as the Chinese economy has slowed and problems with accounting have mounted. These problems may be in the rear view mirror now and some of these stocks are trading at insanely cheap valuations.

Today, China BAK Battery Inc. (NASDAQ:CBAK) is ripping higher, trading at $3.12, +1.40 (81.40%). This is just one of the Chinese stocks pushing higher.

When stocks like CBAK start running on no news, you have to start watching other Chinese ADR's. An 80% move is something that is significant to any investor and if it is replicated in other Chinese stocks, you need to be a part of it. I will be alerting my members to any Chinese plays that look like they are going to blast higher.

0

The markets are pulling back slightly today after huge gains last week. The SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is trading at $140.36, -0.97 (-0.69%). I called and profited from last weeks major rally the market due to the technical signals that were clearly visible using the proprietary PPT Methodology. The profits flowed on stocks like Molycorp Inc (NYSE:MCP), Apple Inc. (NASDAQ:AAPL), Chevron Corporation (NYSE:CVX) and International Business Machines Corp. (NYSE:IBM). Members were alerted to these trades live as I took them and profited alongside me.

While the sentiment has turned towards the bullish side, I am now becoming a little more conservative. The rally was choreographed but now things are slightly less clear. Politicians in Washington D.C. have one month left to agree on terms to avoid the Fiscal Cliff. This is what has me playing it safer now and taking most of my profits off the table. The market will start to get nervous again if no deal is reached by the end of this week. In my estimation, the government has until December 15th, 2012 to make a deal happen. If not, the markets will go to the next stage, panic.

The pressure is on and the question marks are plenty. This means take profits and play it smart. That is what I am doing until I see better clear but signals. Take the seven day free trial to the Research Center. Get the proprietary PPT Methodology which has enabled us to call every major and minor move in the markets and stocks. Get swing trade alerts, dailiy videos and market reports. Become part of the elite today.

0

This morning, most of the leading energy stocks are declining lower at the start of the trading session. Exxon Mobil Corp (NYSE:XOM) is considered to be the leading energy stock in the broad energy sector. Today, XOM stock is trading lower by 0.91 cents to $88.18 a share. Short term traders should watch for intra-day support around the $88.07 and $87.54 levels.

Some other leading energy stocks that are coming under selling pressure include Chevron Corp (NYSE:CVX), ConocoPhillips (NYSE:COP), and Devon Energy (NYSE:DVN). The energy sector accounts for roughly 16.0 percent of the S&P 500 Index. Traders should also note that the energy sector will generally trade inverse to the U.S. Dollar Index. Today, the U.S. Dollar Index is trading slightly higher on the session.

0

As Black Friday looms, investors are taking a closer look at the retail stocks in hopes of finding the next gem. Today, the markets are trading flat which was widely expected after the monster rally yesterday. While things seem quiet, there is some major action in the retail sector.

Best Buy Co., Inc. (NYSE:BBY) is taking a beating after swinging to a third quarter loss on charges. The stock is trading at $12.14 -1.61 (-11.71%) and is hitting a new 52 week low. This retailer would not be one to mess with in the near term into Black Friday unless a bottoming tail is seen on the chart. It is cheap, but no reversal signal has been seen.

Before we get into a few other retailers, let's look at how the retail ETF is holding up. Merrill Lynch Retail HOLDRS ETF (NYSEARCA:RTH). The chart of the RTH has fallen off the 52 week highs. Last Friday, it kissed the 200 moving average which was major support. Since then, it has experienced a solid bounce back to the 50 and the 20 moving averages. Unless it regains the 20 and 50 moving average on a closing basis, the ETF is at resistance. It is wise to handle the RTH with care and keep a neutral on it based on these factors.

Looking at Tiffany & Co. (NYSE:TIF), American Eagle Outfitters(NYSE:AEO), Bed Bath & Beyond Inc. (NASDAQ:BBBY) I find myself without anything positive to say about the charts. This tells me the holiday season may be dissapointing in a major way. This almost makes perfect sense based on the Fiscal Cliff issue facing the entire market and economy. Think about it this way, if Americans do not know if their taxes will be going up next year, if the economy could spin into a new recession or worse due to the Fiscal Cliff, they are unlikely to spend. Therefore, the fact that retail stocks look horrible make perfect sense.

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0

One of the leading and best performing stock sectors since October 4, 2011 has been the home-builders. Many traders and investors have missed this move higher in the home-builder stocks simply because this industry group has been depressed since topping out in August 2005. Quite frankly, this recent rise in the home-builder stocks can be categorized as a stealth rally, the sector has really sneaked under the radar of most traders and investors. The home-builder industry group still remains one of the strongest stocks sectors at this time.

As many of you know, the Federal Reserve recently announced its latest and greatest quantitative easing program labeled QE-3. This program include the purchase of $40 billion worth of mortgage backed securities every month. This news is certainly bullish for the home-builder stocks in the near term. The only problem with this industry group at this time is that they have run very far in such a short amount of time. In other words, the leading home-builder stocks are now trading into very important resistance levels on the weekly and monthly charts.

Many of the leading stocks such as Toll Brothers Inc (NYSE:TOL), and Lennar Corp (NYSE:LEN) have now retraced higher by 50.0 percent of their overall declines from the 2005 high. These stocks will now need to pullback or really consolidate much more before moving significantly higher on the charts. Other market leading home-builder stocks such as D.R. Horton Inc, KB Home (NYSE:KBH), and Pulte Group Inc (NYSE:PHM) have not rallied as much as Toll Brothers, and Lennar Corp. This tells us that Toll Brothers ,and Lennar Corp are the leading stocks in the sector.

Many talking heads in the financial media are calling a bottom in the housing and home-builder sectors. Whether or not the bottom is in for the home-builder sector really does not matter as a technical trader. A technical trader will simply wait for the correct and best chart patterns to present itself for a buying opportunity. Remember, the patterns on the charts are simply footprints of human emotion. So far, the home-builder stocks have made a solid first move higher, now it is all about waiting for the next opportunity in the sector.. Traders now must wait down the road a bit for the next buying opportunity to appear before buying into this sector again for the long term. Obviously, there will be short term trades that can be made while we wait for the next long term buying opportunity.

1

If you are trying to invest or trade against the institutions, you have no shot. It is as simple as it gets. They have the power and the technology to whip you in and out of your positions and they do it almost every day. It is so sad to see average investors just giving money away but that is how the markets are these days.

Once in a lifetime you get a chance to be part of something truly great. These rare opportunities are fleeting and if missed, will never come again. The PPT Methodology is that rare chance. It is the only way you will ever consistently make money in the stock market. It competes with, and beats high frequency trading programs as well as hedge fund managers.

I have spent well over a decade perfecting it and with every major move in the markets, it proves itself again. Just last week, the markets are collapsing lower. Fear was spreading due to the impending Fiscal Cliff fiasco. The media was in a state of panic and analysts were saying to stay away from stocks like Apple Inc. (NASDAQ:AAPL), Google Inc (NASDAQ:GOOG) and Chevron Corporation (NYSE:CVX). However, all indicators within the PPT Methodology was telling a far different story. They were flashing green, saying buy the market, buy stocks. Sure enough, the market reversed Friday as expected and is now surging today. The SPDR S&P 500 ETF Trust (NYSEARCA:SPY) hit a low of $134.70 on Friday. Today, it is trading near its highs at $138.63, +2.28 (1.67%).

1

If you are trying to invest or trade against the institutions, you have no shot. It is as simple as it gets. They have the power and the technology to whip you in and out of your positions and they do it almost every day. It is so sad to see average investors just giving money away but that is how the markets are these days.

Once in a lifetime you get a chance to be part of something truly great. These rare opportunities are fleeting and if missed, will never come again. The PPT Methodology is that rare chance. It is the only way you will ever consistently make money in the stock market. It competes with, and beats high frequency trading programs as well as hedge fund managers.

I have spent well over a decade perfecting it and with every major move in the markets, it proves itself again. Just last week, the markets are collapsing lower. Fear was spreading due to the impending Fiscal Cliff fiasco. The media was in a state of panic and analysts were saying to stay away from stocks like Apple Inc. (NASDAQ:AAPL), Google Inc (NASDAQ:GOOG) and Chevron Corporation (NYSE:CVX). However, all indicators within the PPT Methodology was telling a far different story. They were flashing green, saying buy the market, buy stocks. Sure enough, the market reversed Friday as expected and is now surging today. The SPDR S&P 500 ETF Trust (NYSEARCA:SPY) hit a low of $134.70 on Friday. Today, it is trading near its highs at $138.63, +2.28 (1.67%).

0

This morning, the major stock indexes are all surging higher on the session. Most leading stock sectors are participating in the move higher making this a broad based rally. The one sector that every trader and investor should follow closely is the energy sector. The energy sector accounts for roughly 16.0 percent of the S&P 500 Index. Today, almost every leading energy stock is trading higher on the day helping to fuel the rally in the major stock indexes.

Traders can easily follow the Energy Select Sector SPDR (ETF) (NYSEARCA:XLE) and see that it is trading higher by $1.61 to $70.52 a share. When the XLE climbs most every leading energy stock will follow. While the XLE will give traders a broad sense of the sector the leading stock is Exxon Mobil Corp (NYSE:XOM). This stock is surging higher by $1.59 to $88.01 a share. Short term traders can watch for intra-day resistance around the $88.56, and $89.00 levels. The daily chart of XOM has been very oversold recently so short covering could push the energy stocks even higher in the near term.

Some other leading energy stocks that are climbing higher today include Chevron Corp (NYSE:CVX), Devon Energy Corp (NYSE:DVN), BP plc (NYSE:BP), and ConocoPhillips (NYSE:COP). All of these stocks will generally trade higher when the U.S. Dollar Index declines or trades lower, that is certainly the case at the start of the day. Should the U.S. Dollar Index somehow catch a bid higher the energy sector could pullback from the early morning session highs. [more]

Recs

0

This morning, the highly followed transportation sector is once again very weak. The popular and highly followed iShares Dow Jones Transport. Avg. (ETF) (NYSEARCA:IYT) is declining lower by 0.78 cents to $86.47 a share. On November 6, 2012 (election day) the IYT traded as high as $92.38 a share. So as you can see, this has been an incredible decline for the IYT in just nine trading sessions. Short term traders can watch for intra-day support around the $85.70, and $85.00 levels. The daily chart for the IYT will have support around the $83.50, and $80.50 levels.

When the transportation stocks decline it is usually a sign of economic contraction. The opposite is true when the transportation sector trades higher, it is a sign of economic expansion. Many traders and investors will view the transportation sector as a leading indicator for the stock market. Some leading transport stocks that are declining lower today include Fedex Corp (NYSE:FDX), Union Pacific Corp (NYSE:UNP), United Continental Holdings Inc (NYSE:UAL), and United Parcel Service Inc (NYSE:UPS).

4

If you ask people what their favorite long would be in a bad market, not one would say Hewlett-Packard Company (NYSE:HPQ). However, this makes total sense to me. In a strange way it is a defensive play that offers a possible turn around story.

Hewlett-Packard has been hammered in 2012, falling from a high of $30.00 down to the current level of $13.01. While that would make most investors scared and bearish, to me it screams, 'On Sale'. Not only is it sitting at low risk levels but the company is paying a 4% yield and is set to have a P/E ratio of just 4.

Analyzing this from a great risk/reward angle, the stock is set to possibly have a turn around. Even if there is no turn around, you make 4% a year in dividends and the stock will only have a 4 P/E. Just think if they start to turn the company around. This seems like an obvious long to tuck away for the future at the current $13.00 level.

2

Traders and investors have been obviously selling this stock market since September 14, 2012. As we all know by now, on September 13, 2012 Federal Reserve Chairman Ben Bernanke announced his latest quantitative easing program labeled QE-3. This announcement by Chairman Bernanke certainly helped President Obama to get reelected. Many investors were feeling pretty good about the stock market back in September. Now investors are looking at possibly new tax hikes and weaker corporate earnings. If there is anything that the stock market hates it is new taxes and weaker earnings by public corporations.

A fair case can be made that the only reason corporate earnings have declined is because of the stronger U.S. Dollar Index. When the U.S. Dollar Index strengthens it has generally caused the stock markets to weaken. This inverse relationship between the U.S. Dollar Index and the major stock indexes has been in place for the past 11 years. The problems that the central banks have now is that the economy around the world is declining faster than the United States and this could actually keep the U.S. Dollar stronger against other currencies such as the Euro, British Pound, and others. Traders can easily look at the recent strength in the PowerShares DB US Dollar Index Bullish (NYSEARCA:UUP). Should the UUP decline that is when traders will notice that the stock market will likely bounce and trade higher. The chart of the U.S. Dollar Index is clearly the most important chart that any trader can follow.

What is the U.S. Dollar Index going to trade in 2013? This question is probably the most important question that any trader can ask themselves. Now you can see why this is one of the reasons it is so important to interpret and read the charts that carve out patterns of emotion by investors and traders. When I examine the U.S. Dollar Index it tells me that if the U.S. Dollar Index trades above the $86.00 level on the charts that is when panic could really hit this stock market. Could this happen in the next year or two? The answer is yes, it is very possible that it could occur down the road. At least you all know the level on the U.S. Dollar that could cause panic in the global markets.

Some leading equities that trade inverse to the U.S. Dollar Index include Freeport-McMoRan Copper & Gold Inc (NYSE:FCX), SPDR Gold Trust (ETF) (NYSEARCA:GLD), ProShares Ultra DJ-UBS Crude Oil (NYSEARCA:UCO), and iPath Dow Jones UBS Copper Total Return Sub-Index ETN (NYSEARCA:JJC). You will notice that all of these equities are commodity related and that is usually the first equitie group to be affected by the stronger U.S. Dollar.

0

Just the facts folks. The markets are trading slightly lower today with the S&P 500 at 1,370.68, -3.85 (-0.28%). The markets kissed the master level of on the tracking ETF for the S&P 500, the SPDR S&P 500 ETF Trust (NYSEARCA:SPY). This is the number one factor that should yield a near term bounce.

Other factors also are very apparent. Market leading stock Apple Inc. (NASDAQ:AAPL) is holding up well. The recent massive fall it Apple has stalled and the stock has found buyers. This tells us the market will hold this area in the near term. Next, throw into the mix options expiration. Far too many bears out there right now in the way of puts. Institutions will do their best to make sure those puts expire close to worthless. To do that, the markets need to get a bid. Last, key levels are getting tagged on many stocks. Chevron Corporation (NYSE:CVX) and JPMorgan Chase & Co. (NYSE:JPM) are both hitting key support levels as well as other major players.

0

Everyone knows that the Federal Reserve Bank Chairman Ben Bernanke is responsible for the asset prices in the United States. Since the financial crisis began in 2007 it has been Chairman Bernanke's policies that have inflated the stock markets not the policies put forth by President Obama. In December 2008, Chairman Bernanke cut the fed funds rate to basically zero percent. The fed funds rate is the overnight interest rate that is given to the large banks such as Citigroup Inc (NYSE:C), J.P. Morgan Chase & Co (NYSE:JPM), Wells Fargo & Co (NYSE:WFC), and Bank of America Corp (NYSE:BAC).

The powerful central bank has also been buying mortgage backed securities (MBS), U.S. Treasuries, and other debt instruments. These purchases are called quantitative easing by the Federal Reserve. The central bank is now on its third quantitative easing program called QE-3. This latest and greatest stimulus program includes the purchasing of $40 billion in mortgage-backed securities each month. The ending of this program has not been announced and that is why many investors call it QE-eternity. All of these bond buying programs artificially push down long term interest rates. Lower interest rates allow money to be easily accessible for qualified borrowers. These policies have certainly helped to boost the U.S. housing market which has been very depressed since 2007.

Leading home-builder stocks such as Toll Brother Inc (NYSE:TOL), Lennar Corp, and others stocks in the sector are now trading near four year highs. The last time the Federal Reserve cut interest rates so aggressively was in 2002. Many traders and investors blame the central bank for the last housing and credit bubble. Could they be creating another bubble at this time with these extremely low interest rate policies?

Since the 2009 low in the S&P 500 Index the stock market has faced several major stock corrections. To the credit of the Federal Reserve and Ben Bernanke they have been able to inflate the stock markets higher just before a major technical breakdown in the major stock indexes. Many investors will say that you should never fight the Federal Reserve. So far, every stock market dip has been a buying opportunity. What will happen when and if the stock market no longer inflates from the central bank's monetary policies? This is where it pays to be a technical trader and investor in the stock market. A strong case can be made that the central banks around the world simply create bubbles before the next recession and possible stock market collapse. This is why it should be a traders market for years to come. The real concern for traders and investors is going to be when the central bank can no longer inflate the stock markets higher. Until that time, trade the technical charts.

1

The price action over the last few trading days in Apple Inc. (NASDAQ:AAPL) is signaling a near term bottom in the stock. The iPHONE maker has fallen from a 52 week high of $705.07 to low on Friday of $533.75. This is a drop of almost 25%. When looking for a bottom, the percentage drop means little. What means the most is the price action.

The price action on Apple has switched from bearish to bullish since last Friday. First, note the reversal on Friday. The stock tried to break lower and ended the day sharply higher, even with a late day swoon in the stock market. Today, the stock opened higher only to sell off. However, it has since rebounded. The low today was higher than the low on Friday. Higher lows are a bullish signal.

These signals, compiled with a 25% stock price correction and an overly bearish Wall Street signal a bottom is in the making in the near term. Upside could take the stock back to $600.00 in the near term.

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